AN UPDATE ON LEGISLATION AFFECTING ENERGY USAGE IN AND SAFETY OF BUILDINGS IN LOS ANGELES

In the past two to three months, both the State of California and the City of Los Angeles have enacted measures affecting a large number of buildings locally. The impact of the legislation will be pronounced, although implementation thereof will be spread out over a number of years.

AB 1103 Is Out

For the last couple of years, we have been faced with potential compliance and disclosure requirements with regard to energy usage in certain commercial buildings in the State. That legislation, AB 1103, produced a lot of controversy. It was made applicable at first to sales and leases of certain types of single-occupant structures with large floor-space square footage. The size of buildings requiring the disclosures was then reduced, making it applicable to a greater number of structures. As its scope was about to be extended even further, to single-occupant buildings with less than 5,000 square feet of floor space, it became clear that its enforcement would be problematical. The California Energy Commission (“CEC”), the regulatory agency in charge, decided to re-evaluate what should be the scope, and timing of implementation, of measures for these smaller locations and so the CEC postponed compliance dates.

Finally, rather than try to modify the existing legislation, the CEC drafted and the State Legislature enacted legislation scrapping AB 1103 entirely, effective as of January 1, 2016. What will replace it is at the moment unclear. The legislation involved, AB 802, provides for rules to be developed over the next year and to take effect January 1, 2017.

In the meantime, the City of Los Angeles is working on its own energy disclosure regulations. Those pertaining to city-owned buildings are targeted to be put into place sometime this year, while those for privately owned buildings (at least ones having over 50,000 square feet) are expected to come into effect in 2017.

Ordinance 183893

The City of Los Angeles has ratcheted up its retrofit requirements by passing Ordinance 183893, enacted with earthquake concerns in mind. There are two programs. One addresses so-called “soft-story” buildings, multi-story structures with weak and/or open-front wall lines (most notably those with “tuck-under” parking). The other focuses on “non-ductile concrete structures,” older concrete buildings which were not designed to withstand major lateral force movement in earthquakes. The types of properties affected by each such program, and the compliance deadlines, are described briefly in the two attached publications from the Los Angeles Department of Building and Safety (“LADBS”). These were among the items covered by Raymond Chan, currently the head of the LADBS, when he was a guest speaker this past November at Joe Cobert’s Real Estate Finance class at UCLA Extension.

For more information and advice on specific properties, feel free to contact Joe and the Firm.